National Housing Authority v. Roxas
REITERATIONFacts
The Antecedents: Respondent Ernesto Roxas applied for commercial lots in the Dagat-dagatan Development Project. The National Housing Authority (NHA) approved his application and issued an order of payment and notice of award for Lots 9 and 10. Roxas made a downpayment. Subsequently, a relocation survey renumbered the lots and increased their area. The NHA informed Roxas of the increased area and proposed a higher price per square meter for the additional area. Roxas appealed for the original price, citing the NHA's unilateral imposition of the lot substitution and area increase. After the NHA rejected his appeal, Roxas filed an action for specific performance and damages, seeking to compel the NHA to execute a contract to sell for the entire area at the original price and terms. The NHA countered that Roxas could not claim more than originally awarded and that his right to the additional area was limited to first refusal. Procedural History: The Regional Trial Court (RTC) ruled in favor of Roxas, ordering the NHA to execute a Contract to Sell for the entire area of 320 square meters at P1,500.00 per square meter under the original terms and conditions, and to pay attorney's fees. The NHA appealed to the Court of Appeals (CA), which affirmed the RTC's decision. The NHA then filed a petition for certiorari with the CA, challenging the RTC's orders granting the motion for issuance of a writ of execution and denying the NHA's motion for reconsideration. The CA dismissed this petition, finding no grave abuse of discretion by the RTC. Subsequently, Roxas filed a motion for issuance of a writ of execution, which the RTC granted. The NHA's motion for reconsideration was denied, and the RTC issued the writ of execution. The NHA filed another petition for certiorari with the CA, which was again dismissed. The Petition: The National Housing Authority (NHA) filed a petition for review on certiorari with the Supreme Court, challenging the CA's decision that affirmed the RTC's order to issue a writ of execution. The NHA argued that the monetary judgment against it could not be executed without first being submitted to and passed upon by the Commission on Audit (COA), as per Presidential Decree No. 1445. The NHA contended that its submission to litigation did not waive its sovereign immunity regarding the execution of monetary judgments and that the attorney's fees awarded were a monetary obligation requiring COA approval. The Supreme Court partially granted the petition, modifying the writ of execution to require Roxas to file his claim for attorney's fees with the COA, while upholding the execution of the main relief concerning the contract to sell.
Issue(s)
Whether the NHA, a government-owned and controlled corporation, is immune from the execution of a monetary judgment. Whether the monetary judgment for attorney's fees awarded to Roxas must first be submitted to the Commission on Audit before execution.
Ruling
The Supreme Court partly granted the petition for review on certiorari, modifying the writ of execution. It enjoined Roxas to file his claim for attorney's fees with the Commission on Audit pursuant to Presidential Decree No. 1445.
Ratio Decidendi
On the issue of NHA's immunity and the execution of the judgment: The Court reiterated that the NHA, being a government-owned and controlled corporation created under Presidential Decree No. 757, is explicitly authorized to sue and be sued. Therefore, the mantle of the State's immunity from suit does not extend to the NHA, and it is not immune from Roxas' suit. The Court distinguished between the main relief of specific performance, which involved the execution of a contract to sell, and the secondary relief of attorney's fees. The execution of the contract to sell was considered within the ordinary course of the NHA's management and disposition of its housing projects, as authorized by its charter. Thus, the NHA possessed the legal competence to afford this main relief without Roxas needing to first submit it to the COA for review and approval. To hold otherwise would grant the COA the power of judicial review over court decisions, which is unconstitutional. On the issue of submitting the claim for attorney's fees to the COA: The Court held that settling or paying the attorney's fees of ₱30,000.00 constituted a monetary obligation of the NHA that was not in the usual course of its activities under its charter. Pursuant to Section 26 of Presidential Decree No. 1445, Roxas should first bring this claim to the COA prior to its enforcement against the NHA. The COA's audit jurisdiction extends to all government-owned or controlled corporations and all debts and claims of any sort due from or owing to the Government or any of its subdivisions, agencies, and instrumentalities. The Court emphasized that where the law does not distinguish, the courts should not distinguish, meaning there should be no exception to the COA's jurisdiction over such claims unless a compelling reason exists. The universal rule that the State, even when it gives consent to be sued, may limit the claimant's action up to the stage anterior to execution, preventing seizure of government funds and property, was invoked to support this conclusion.
Main Doctrine
While a government-owned and controlled corporation like the NHA may sue and be sued, monetary judgments against it, particularly those not in the ordinary course of its business operations, must first be submitted to and passed upon by the Commission on Audit before execution.